1997 Summer ACTE Quarterly: President's Message | Expense Management Solutions| Hot Topics Survey

Expense report software leads to shorter processing cycles, better control, cleaner data capture and increased cash flow. So what's taking everyone so long?

Expense Reports: a drag for travelers, an even bigger drag on corporate resources.

For most companies, expense report processing is a grossly inefficient process. The average processing time, factoring in the involvement of the traveler, the approver, an auditor, and accounting personnel, is about 1 hour and 20 minutes, according to Shimon Avish, a senior consultant with the Travel Management Group, Alexandria, Virginia. That costs the company, on average, $25-45 per reconciled expense report. "A company that processes 15,000 T&E reimbursements per year that switches to an automated reimbursement system could see that figure drop to 15 minutes and $13.50 per report," Avish said. Theoretically, the savings for this hypothetical company could reach as much as $472,500 the first year.

Clearly, streamlining the process could help companies reap great benefits in the short and long term Avish noted dryly. Its not just the hard cost savings that make automating expense reporting so attractive. It takes an irritating burden off the traveler and his or her staff. And it allows companies to collect much cleaner back-end data which more accurately reflect actual expenditures. That is essential come negotiation time Avish pointed out.

The cost of inefficiency also includes the waste, or slippage, that occurs when companies don't, for whatever reasons, recoup what's financially recoverable. This includes Value Added Tax (VAT) on international trips, the value of unused airline tickets, and errors in the company's favor made by either travelers or vendors.

Variety/Choice

Agreeing that automation is a vital tool in T&E management isn't the issue. Finding and implementing the right expense management system is. Experts agree that improving the process isn't as simple as shelling out tens or hundreds of thousands of dollars on software.

"The expense report process should be part of an overall T&E management reengineering strategy" said Rajeev Singh, Vice President of Products for Portable Software, which creates and markets software solutions predominantly for Fortune 1000 companies. "It shouldn't be viewed as a single, isolated component. Not only is the expense management process tied into a series of other T&E processes, policy implementation and review, booking, approvals, reporting, but also involves the capabilities of other suppliers, like charge card companies, travel agencies and CRSs. And back-end integration is another critical consideration."

Whatever system you choose for expense report management must be able to integrate with any financial system on the market. Companies have three places to turn to for automation products: third party software developers, mega-agencies, and, increasingly, themselves.

Some firms, including Allied Signal and Hewlett-Packard, are exploiting their own corporate resources to develop proprietary expense processing systems. Allied Signal rolled out its first automated system in 1994 and has enhanced it several times since. it's so user friendly that since its introduction, submissions of the traditional paper expense report has dropped to 20%. A team of auditors regularly analyzes a statistically-significant sample of electronic expense reports to check user activity and to flag policy violations.

In 1995, Hewlett-Packard assigned an international team of travel managers to tackle the process of improving its expense report procedures on a global basis. The product, TRAMS (Travel Management System) was dear: roughly $600 million was invested in development costs, and project manager Jeff Kurn says it will cost nearly $300,000 a year in annual administration, training and support costs worldwide. But with an annual T&E outlay of $600 million, the investment will reap impressive dividends over the long haul, now that processing costs will drop as low as $5 per report. Kurn estimates that every year, expense report savings will total at least $450,000, in part through reduced accounting department headcounts.

The Agency Connection

According to some industry estimates, there are roughly two dozen software systems offered by third party vendors (see below for examples). But rather than go with an independent, some travel managers are choosing to partner up with their travel agencies to customize and manage their expense reporting function.

American Express, Rosenbluth International, Carlson Wagonlit and Travel One have all invested in their own expense report systems, all of which integrate with those agencies' reservations and MIS tools, and in the case of Amex and Carlson, integrate with their corporate card product as well. Other megas are forming alliances with third party vendors to private-label expense report software. Some illustrative examples follow.

Travel Agencies

American Express

With Expense Manager, in broad use since 1995, data from American Express corporate cards are sent via e-mail straight to the travelers' desktop or laptop computer. The traveler imports charge details from these e-mail messages into the expense-report program. A split screen displays current charges on the left, and a template for an expense report on the right; through clicking and dragging, a simple expense report for, say, a two-day business trip, can be completed in less than a minute. Once the report is completed it can be sent by e-mail to a department head for authorization and/or to accounts payable for disbursement.

Special features: For more complex reports, there's a wizard feature that sorts expenses automatically. The only keying in is to account for cash expenses and to make annotations, such as trip purpose, explanations for deviations from policy, or project/client codes.

What's new: A new Intranet version, from which travelers can access their Corporate Card charges, create their report, and file them for approval and auditing. Workflow allows access by multiple users and permits multiple approval paths. Rollout is expected in the fourth quarter of this year.

For information: 800-AXP-1200 or www.americanexpress.com/corporateservices.

BTI Americas

"We've taken a different approach than other megas," said Laura Lane, Manager of Technology Solutions for BTI Americas. "We acknowledge that expense management isn't our core business, so we decided that building our own product didn't make a lot of sense. Nor, she said, did linking with a single third-party developer. Our clients spend anywhere from $1 million to $100+ million a year, and they're on every platform imaginable, so there isn't a single solution out there to meet our customers needs and objectives."

So rather than being a provider, BTI Americas offers expense report management consulting services. "We've designed a 5-step re-engineering approach," Lane said. "It begins with an overall process review, follows with systems analysis to determine platform and integration issues, then leads to a best practices recommendation. We follow with the RFP and vendor selection process. Last, we get involved with implementation when and where it makes sense."

McCord Travel Management

Chicago-based McCord has recently become a minority investment partner in Value Integrated Network of Barrington, Illinois, acting as its own beta-site to try out enhancements. Meanwhile, McCord markets VIN.net to its corporate clients, either as a stand-alone application or as part of an integrated system through Sabre Business Travel Solutions (BTS), the integrated suite of T&E software solutions. (BTS recommends VIN.net along with six other third-party expense software vendors.) According to Bruce Black, McCord President, VIN.net pricing to McCord customers is roughly $2.50 per finished report, which he says represents roughly 75-85% savings over to manual processing.

Special features: The software can be downloaded by modem, saving considerably on roll out, and on the costs associated with integrating software onto the desktops or laptops of every traveler.

What's new: An Internet-based version, which will incorporate report submission and Management review.

For information: 312-527-1500.

Rosenbluth

In December, Rosenbluth International announced a partnership with Captura Software, the Bothell, Washington-based developer of T&E reporting software. The Expense Management product is an integrated system that combines booked and billed data, and ties together the travel, corporate card, finance and T&E reporting functions. A user-friendly graphical interface makes it easy for travelers to enter data, submit, and track their expense reports. Open, client-server-based architecture facilitates its integration with a company's existing hardware and software systems.

Special features: interfaces with Rosenbluth's E-Res Electronic Reservation System, and VISION Direct, the agency's pre-and post-travel desktop reporting tool. Companies that want to farm out their entire Expense Management function may hire Rosenbluth to handle any necessary manual processing, such as matching receipts, and fulfillment of expense reimbursements.

For information: (215) 977-4800; www.rosenbluth.com.

Third party software companies

Ballou Internet Services

The 18-month-old company has developed NetSelect Expense as a browser-based system that can be accessed though the Internet or intranet (WAM or LAN). Reports are routed for approval and then seamlessly interface to any financial accounting system. Because the system is Internet-based, installation and enhancement costs are virtually nil, and managers can review, approve and administer expense reports when it's convenient for them, even when they're on the road. As with any Internet-based system, the software works with multiple operating systems.

Special features: hyperlinks speed users around the expense report form. Users can clone previous reports and make minor changes to speed up data entry.

For information: 888-4-BALLOU; www.ballou.net.

Captura Software

Captura's Employee Payables product has two parts: Expense Station is used to enter expenses in a checkbook-type register, not a traditional expense report template. The data are then submitted by e-mail to Expense Central for processing. There, traveler's e-mailed information is matched up with credit card transaction data that's come in by direct electronic feed. Reimbursement follows only after the report has passed a policy test. (If there's a violation, a manager is notified before the processing can resume.)

Special feature: special fields for government contractors.

What's new: A browser application, and receipt tracker, which works with a bar code reader to tag and track paper receipts. Also: Expense Payables Workbench, a tool that allows companies to quickly and easily update their corporate expense policies online; new user-directed approvals function increases flexibility in deciding who should approve an expense report useful for companies with matrix organizations or employees who change projects or departments often.

For information: (206) 487-9484; www.captura.com.

Gelco

ExpenseLink is a PC-based system that allows employees to submit customized reports via paper, phone, or PC and receive electronic reimbursements for personal expenses and corporate card charges within three days. Designed for companies with more than 150 traveling employees, its platform allows mobile, LAN or WAN-based employees to use drop-down lists to quickly enter detailed records of travel expenses. Gelco claims its product reduces the average cost of processing an expense report to under $7.00.

For smaller companies, or for those employees who don't travel with laptop computers, Gelco also offers Traveletter Direct. With it, travelers use a telephone keypad to enter their expenses into Gelco's system. Reimbursement also takes three days, and expense data is automatically fed into the corporate general ledger.

Special feature: A best practices methodology that checks expense reports for compliance with policy. Standard business expenses initiate payment. Irregular or excessive expenses are automatically flagged and routed for special approval or audit.

What's new: ExpenseLink 2.0, new since May 1997, uses a Win95 front end.

Customers: Lever Brothers, Gerber, James River, Kraft Foods, Hallmark, Revlon.

For information: (612) 947-1500; www.GelcoNet.com.

Interpro Software

The Rosemont, Ill. maker of Expense Express has worked closely with several companies, including Cargill, to beta-test and enhance its expense management product. It features an intuitive interface with pull-down menus, fill-in-the-blank formats, and ability to send report by e-mail to manager. Especially useful for itineraries involving multiple countries is the feature that allows travelers to track multiple currencies on the same day and change rates (by overriding the tables) if currency fluctuations are significant.

Special features: Expense Regulator, which lets companies define and name their own expense categories. For Cargill's US employees, meals and hotel expenditures are logged in separately. In the UK, travelers report them together, in a category called, tersely enough, subsistence. Also: translation in 28 languages.

For information: 847-299-9090; www.interproinc.com.

Portable Software

The privately-held Redmond, Washington-based company first entered the business travel management scene in 1993 with QuickXpense, which was an instant hit. Its flagship product, Xpense Management Solution (XMS), was so eagerly anticipated that 20 Fortune 1000 companies signed on in its first nine months of release. There are now about 200 companies around the world using it.

XMS is a client/server-based solution that integrates with a company's existing and future charge card systems, financial, travel, e-mail and operating systems. Open architecture accommodates multiple computer platforms. E-mail reports go directly to the server, and each night XMS sends them into the payroll system for automatic reimbursement.

Special features: Xpense Analysis and XpenseInsight, two reporting features, build sophisticated customized reports for department managers, travel managers, and accounting and corporate MIS departments.

What's new: Version 2, which was released in late May, integrates with travel booking data from SABRE Business Travel Solutions data and builds expense reports from automatic credit card feeds. Also: an alliance with Citicorp Diners Club. Portable Software will provide XMS to Diners Club Corporate Payment Systems customers; electronic charges will prepopulate the XMS expense report. Portable is also beginning a extensive rollout in Europe this year, notably in the U.K., Belgium and France.

Clients: S.C. Johnson Wax, Anheuser-Busch, Pharmacia & Upjohn, Fujitsu Computer.

For information: (206) 702-8808; www.xpense.com.

RPL Expense Management Services

RPL, based in Dresher, Pennsylvania, bills itself as a strategic out-sourcing firm specializing in software, technology and value added services which result in best-practice transaction processing. It helps companies automate their expense reporting and outsource document processing. RPL markets ADP's e-XPENSE software, which enables companies to eliminate paper-based expense reporting. It also includes the administrative functions of day-to-day expense report processing, funds disbursement, and administrative and information exchange.

Software is customized to allow for variances in corporate policy. Managers can use electronic signatures, on-line or off-line approval, create on-line reports and assure multi-level authorizations. RPL generates reimbursement through direct deposit, and reimbursements are confirmed by e-mail or voice-mail. Archives are maintained of expense reports and supporting receipts.

Special features: For travelers without access to PCs, the company offers an Interactive Voice Response (IVR) alternative that's activated by touch-tone phones.

What's new: ASI Inquire, an on-line analysis program that will allow customers to analyze travel data instantly.

For information: 215-886-7400; [email protected].

Stage 1 Development

Stage 1 Development, based in Irvine, California, has been in the business for more than 10 years, and claims that 95% of its business comes from client referrals. GEMS, the Global Expense Management Software component of Expensetrak, is a client server system, using a Sybase/Microsoft SQL Server as the back end and Windows in the front. It manages information feeds from travel agencies, corporate cards and suppliers authorized to directly bill the company. The system is LAN, WAN e-mail, Intranet, and Internet capable.

Special features: automatic routing, review, issue resolution and settlement is designed into the software. Also: it supports multiple currencies and multiple languages. Generic interfaces allow payments to be made through payroll, accounts payable, and posting to the general ledger.

For information: (714) 450-0390; www.stage1.com.

Summer ACTE Quarterly: President's Message | Expense Management Solutions| Hot Topics Survey